In the world of extended service plans (ESPs), extended warranties, or service and parts replacement programs, many consumers have become immune to the common tactics used to sell these programs. In fact, if your sales team is still selling the “what if” scenario to today’s ultra educated consumers, your store is losing out on valuable sales that help drive high-margin growth and revenue.
According to NBC News, extended warranties help fuel a booming $15 billion-a-year business; therefore, it’s imperative that retail sales personnel hone their sales approaches for “add on” sales such as ESPs. Through ongoing training and education, sales teams are better able to overcome “new” objections to these profitable plans and figure out which plan best suits the consumer’s need.
The below selling strategies are simple, but effective ways to help your sales team illustrate the value of ESPs and therefore convert more consumers:
Get consumers’ attention — By stating the obvious such as, “This product is covered under the manufacturer’s warranty for only one year,” you may pique the consumer’s interest enough to have him/her asking more about warranty coverage.
Listen to consumers’ answers — It seems simple, but often sales representatives get so busy pushing sales out the door, they don’t hear what consumers really want to know more about. If a representative addresses some of the comments consumers share during the sales process, then consumers may be more inclined to listen to sales talk about protection plans. Remember, always address consumers’ objections and point out how ESPs overcome the objection.
Give options — Often consumers may be more inclined to purchase extended coverage if they know they have options. This puts them in the driver’s seat to select the coverage that best suits their needs. For example, offer extended or standard warranty coverage and let them ask questions about the difference, which will lead to the sale of a plan that they believe in.
Stay positive — Much like in life, if you focus on the positives, you’ll more likely receive favorable feedback. Focusing on the strong features and benefits of the ESP, consumers may find the up front fee is well worth the investment.
Expert source — Provide consumers with sales representatives’ credentials or the training they receive prior to selling on the floor. (This is most effective if the store posts signs on the floor about the quality of its staff.) In doing so, when a sales member states, “In my experience, ESPs are essential,” the consumer has a frame of reference for why this is a quantifiable statement. Testimonials are another great way to communicate value and benefits (leverage your personal experiences, your customer, your store’s customer, etc.).
Brands that matter — We’ve all fallen victim to the brand game at one point in our lives and consumers are no different. Consumers generally buy the brands they think represent quality or status and frown upon unknown brands. But while some brands make a great washing machine, they may not make a great TV and it shows in the manufacturer warranty details (especially parts and labor). Your staff needs to know the details of the manufacturer warranties just as well as the ESP to help drive home the value extended coverage offers.
Explain the fine print — Helping consumers better understand what’s covered, what’s not and why makes your sales staff their ally. This type of dialogue not only builds trust, but also gives sales staff an opportunity to reveal some of the holes in the manufacturer’s warranty.
Think about it — Once consumers have all the facts about the warranties or ESPs, it’s okay to let them think about their options. Have them walk around the store, talk to their spouse/significant other or speak with customer service representatives about the items they see coming back or how much it costs to repair various products. Often, a different source can be a welcomed change of pace for consumers who don’t want to fall victim to “sales hype.”
Recommend it — If you believe in it, your customers will too. Familiarize yourself with the features and benefits and remind customers how costly repairs or replacements can be if they’re not backed by an ESP.
Ask “why not” an ESP — Sometimes the most obvious questions go unasked such as “Why wouldn’t you want to protect your purchase?” or, “What’s holding you back?” Once your sales staff knows the answer to why, they may be able to employ any number of sales tactics to sell or attach an ESP.
ESPs add significantly to a retail organization’s bottom line because they don’t require inventory space or carrying costs and they offer high margins. Many consumers are receptive to buying ESPs, but they do need to be convinced to add a plan to their basket and are looking to your sales staff to communicate the features and benefits of the plans, as well as your organization’s commitment behind the plans. Sharpening your sales strategies — on and off the sales floor — is a critical step to increasing ESP sales and enhancing the value these plans bring to consumers.
Filed Under: benefits, extended, plans, retail, sales, service, value
AmTrust Financial Services, Inc. (AFSI) today announced continued growth of operating earnings and strong operating return on equity for the third quarter ended September 30, 2015.
For the third quarter of 2015, operating earnings were $150.9 million, or $1.79 per diluted share, an increase of 11%, compared to $135.4 million, or $1.70 per diluted share, in the third quarter of 2014. Third quarter 2015 net income attributable to common stockholders was $182.7 million, or $2.17 per diluted share, compared to $156.6 million, or $1.97 per diluted share, in the third quarter 2014. In the third quarter 2015, changes in currencies resulted in a non-cash $24.7 million, or $0.29 per diluted share, increase in net income. Third quarter 2015 annualized operating return on common equity was 29.2% compared to 34.2% in the third quarter 2014. Annualized return on common equity was 35.4% for the third quarter of 2015 compared to 39.5% for the third quarter of 2014.
Third Quarter 2015 Results
Total revenue was $1.23 billion, an increase of $0.16 billion, or 15%, from $1.07 billion in the third quarter 2014. Gross written premium was $1.78 billion, an increase of $0.26 billion, or 17%, from $1.52 billion in the third quarter of 2014. Third quarter 2015 gross written premium was negatively impacted by $29.4 million due to declines in European currencies. Net written premium was $1.14 billion, an increase of $138.8 million, or 13.8%, compared to $1.0 billion in the third quarter 2014. Net earned premium was $1.05 billion, an increase of $131.0 million, or 14%, from $914.4 million in the third quarter 2014. The combined ratio was 92.6% compared to 91.3% in third quarter 2014.
A summary of Q3 results is listed below along with a link to the earnings release.
Third Quarter 2015
• Gross written premium of $1.78 billion, up 17% compared to $1.52 billion in the third quarter of 2014
• Net earned premium of $1.05 billion, up 14% from $914.4 million in the third quarter 2014
• Operating diluted EPS of $1.79 compared to $1.70 in the third quarter 2014
• Diluted EPS of $2.17 compared with $1.97 in the third quarter 2014
• Annualized operating return on common equity of 29.2% and annualized return on common equity of 35.4%
• Service and fee income of $126.1 million, up 7% from the third quarter 2014
• Operating earnings of $150.9 million, up 11% compared to $135.4 million in the third quarter 2014
• Net income attributable to common stockholders of $182.7 million compared to $156.6 million in the third quarter 2014
• Combined ratio of 92.6% compared to 91.3% in the third quarter 2014
• Gross written premium of $5.19 billion, up 12% compared to $4.63 billion in YTD 2014
• Net earned premium of $2.96 billion, up 13% from $2.62 billion in YTD 2014
• Operating diluted EPS of $4.80 compared to $4.28 in YTD 2014
• Diluted EPS of $4.86 compared with $4.57 in YTD 2014
• Annualized operating return on common equity of 27.7% and annualized return on common equity of 28.1%
• Service and fee income of $346.8 million, up 13% from $308.1 million in YTD 2014
• Operating earnings of $402.8 million, up 19% compared to $339.9 million in YTD 2014
• Net income attributable to common stockholders of $408.2 million compared to $362.7 million in YTD 2014
• Combined ratio of 90.8% compared to 90.7% in YTD 2014
• Book value per common share of $25.81, up 16% from $22.34 at December 31, 2014
• AmTrust's stockholders' equity was $2.62 billion as of September 30, 2015, up 29% compared to $2.04 billion as of December 31, 2014
Filed Under: 2015, AmTrust, earnings, income, operated, premium, Q3, quarter, results, third